The Economic Crisis. Moo.

It always used to bug me when the Government (Federal, State, whatever) would back-track on a promise, or impose some new draconian restriction, or sell-off some irreplaceable family jewelry with the blanket excuse that it was done (or not done, depending) in light of the *current economic conditions*.

They would never say *the BAD economic conditions* because that would spook the market, but we all knew what “current” was an euphemism for: “going to hell in a handbasket”. OR on the edge of going to hell in a handsbasket, most likely in a paddle-less canoe going up shit-creek, as that is where the current was taking most of us. It was this perpetual threat of, “Unless we do (or don’t do, depending) this thing, OMG, it’s going to be even MORE CURRENT than it is (or, by then, was) now!”

By the time I left Australia, despite being one of the best-paid allied health professionals in the country (working on a Public Health Government salary that is), I was going broke faster than a Bernie Madoff investor. For the last few days of each pay fortnight, I would living off canned soup and toast. I kid you not. Mind you that was canned Boston clam chowder and the toast had caviar on it, but nevertheless I was going broke due to my own *current economic micro-climate*.

Slave labour. That’s the answer. Dump the union salaries, I read in this Washington Post article (free, sign-in required, syndicated to the ST, money required), in a piece of advice straight from a chapter in Naomi Klein’s “Shock Doctrine.” A factory workers pay-cut is just important for the recovery as restraining mega-billion payouts to the people who caused this crisis.

Such a practise has kept Singapore the clean, well-lighted golf-course that is is. Pay the maids and the building laborers and accoiutnants and clerical staff and radiographers absolute SHIT money!

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The way I am reading the *current* financial crisis is that;

a) it was caused by the banks lending too much.b) it can be overcome by the banks lending more.

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Ah, here it is explained by the Nobel Prize-winning Two Cows Method:

You have two cows.

John Paulson borrows one cow so he can sell it for $100. He gives you $10 as collateral.

You buy your neighbors cow for $100, which you finance by taking out a $90 loan from the bank and use John’s $10 to make up the rest.

You brag to everyone about your financial health. You have assets–two cows you own, plus one Paulson owes you–worth $300, and liabilities of just $100.

A third of the country goes vegetarian.

You thought your two cows were worth $200 and now they are worth $140.

You express confidence in your financial health. Your assets are now worth only $200–your two cows plus the one John owes you–but your liabilities are still only $100. If necessary, you could sell the assets at this distressed price and pay off all your loans.

You hold onto your cows because you are sure the market is “dislocated.” Some day someone will want to eat beef again.

The rest of the country goes vegetarian. Your two cows are now worth $2 each to guys who want to make dog food.

John Paulson buys a cow in the market for $2 and he gives it to you as repayment of the loan. You now have three cows worth six bucks.

John wants his $10 back.

The bank calls. It wants its $90 back.

You call the Federal Reserve and ask for a bailout.

John Carney. Brilliant. And very *current*. Hat-tip to Alvin as usual.

E@L

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3 Responses

The ”current economic condition” is beginning to get to me; finding it hard to breathe, I think it’s called panic attack.I have to admit naiveté, I didn’t realize how immoral people are, and I don’t mean the rogue bankers big and small. I mean people in general; either immoral or damn thick.I guess what can I expect. After the last world war the ”never again” speak, and here we are since then up to our necks in genocide and refugee camps.Why should I be surprised about the worlds financial – model – collapse, and nothing really happening on the streets other than a slight unrelated British jobs for …. And it’s over with some half cut deal.If ever we were in doubt about the I’m all right jack story we know for sure now. We’ll keep on going till it effects us.Expat@Larg you have a right to be out of sorts.

MomMad: “We keep going till it Affects us,” is I am sure what you mean, and that’s an excellent observation. Look at me, blogging away like I’ve got this cushy job lined up forever.OK: Only the smart ones.